Exhibit 99.1
Jaco Electronics Reports Fiscal 2007 Third Quarter Results
HAUPPAUGE, N.Y.--(BUSINESS WIRE)--May 10, 2007--Jaco Electronics,
Inc. (Nasdaq: JACO):
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Conference Call: May 10, 2007 at 10:00 a.m. ET
Dial-in Number: 800/729-6173 (U.S. and Canada)
Webcast: http://www.vcall.com/IC/CEPage.asp?ID=116897
Web Replay: Available for 90 days
Call Replay: Available until May 12, 2007 at 12:00 p.m.
ET by dialing 800/633-8284
Replay Access Code: 21338148
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Jaco Electronics, Inc. (Nasdaq: JACO), a distributor and
integrator of electronic components and flat panel display solutions
(FPD), today reported results for its fiscal 2007 third quarter ended
March 31, 2007.
Summary of Fiscal 2007 Third Quarter and Nine Months Results
($ in thousands, except per-share data)
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Three Months Ended Nine Months Ended
March 31, March 31,
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2007 2006 2007 2006
- -------------------------========-========-=========-=================
Net sales $49,890 $60,906 $185,498 $ 161,474
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Gross profit 7,780 7,782 24,953 21,564
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Selling, general and
administrative expenses 7,921 7,062 23,123 20,750
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Operating (loss) income (141) 719 1,830 814
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Interest expense 591 622 2,131 1,740
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(Loss) earnings before
income taxes (732) 98 (300) (926)
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Net (loss) earnings (1) (747) 84 (345) (7,379)
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Diluted and basic (loss)
earnings per share $ (0.12) $ 0.01 $ (0.05) $ (1.18)
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(1) During the three months ended December 31, 2005, $6,610,500
was added to Jaco's income tax provision to reduce the carrying value
of the Company's deferred tax asset to zero.
Commenting on the results, Jaco's Chairman and Chief Executive
Officer Joel Girsky, stated, "The quarter-to-quarter volatility of
Jaco's logistics business, serving major global contract manufacturers
with value-added services, impacted fiscal third quarter results as
the Company's logistics revenues declined approximately $4 million on
a year-over-year basis. In addition, fiscal 2006 third quarter net
sales levels reflected significant FPD contributions from a major
customer in the electronic voting machine industry. Excluding this
customer, the FPD group's sales were higher in the fiscal 2007 third
quarter than they were in the comparable year-ago period.
"Jaco's gross profit margin, a function of our sales mix,
continues to vary based on quarterly fluctuations in lower-margin
logistics and inventory management programs. Accordingly, our gross
profit margin in the 2007 fiscal third quarter rose to 15.6%, compared
to 12.8% in the year-earlier quarter. When the Company's logistics
business expands in future quarters, we expect gross margins to once
again return to historic levels. Gross profit was approximately flat
on a year-over-year basis in fiscal Q3, as higher margins offset the
revenue decline.
"SG&A expenses were $7.9 million for the quarter, up from $7.1
million a year ago. We remain confident in the long-term strategic
plan focusing on Jaco's core distribution business, FPD sales and
integration, and our value-added logistics programs.
"Lastly, as a result of Jaco's new credit facility, which we
secured in late 2006, our interest expense for the quarter declined
modestly, compared to the same period last fiscal year."
About Jaco Electronics
Jaco is a leading distributor of electronic components to
industrial OEMs and contract manufacturers. Jaco distributes products
such as semiconductors, capacitors, resistors, electromechanical
devices, flat panel displays (FPD) and power supplies, which are used
in the manufacture and assembly of electronic products, including:
telecommunications equipment, computers and office equipment, medical
devices and instrumentation, industrial equipment and controls,
military/aerospace systems and automotive and consumer electronics.
Jaco has two distribution centers, a recently opened warehouse in
Singapore, and 16 strategically located sales offices throughout the
United States. The Company operates an in-house FPD integration center
housing its engineering and manufacturing staff and operations. The
integration center enhances Jaco's ability to provide customers with
unique value-added display solutions and a "one-stop" source for their
FPD supply and integration requirements. In addition to customized FPD
solutions, Jaco provides a variety of value-added services including
automated inventory management services and assembling stock items for
customers into pre-packaged kits.
JACO ELECTRONICS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(unaudited)
($ in thousands, except per share amounts)
Three months ended Nine months ended
March 31, March 31,
----------------------- -----------------------
2007 2006 2007 2006
----------- ----------- ----------- -----------
Net sales $ 49,890 $ 60,906 $ 185,498 $ 161,474
----------- ----------- ----------- -----------
Gross profit 7,780 7,782 24,953 21,564
Selling, general &
administrative
Expenses 7,921 7,062 23,123 20,750
----------- ----------- ----------- -----------
Operating (loss)
income (141) 719 1,830 814
Interest expense 591 622 2,131 1,740
----------- ----------- ----------- -----------
(Loss) earnings before
income taxes (732) 98 (300) (926)
Income tax provision 15 14 45 6,452
----------- ----------- ----------- -----------
Net (loss) earnings $ (747) $ 84 $ (345) $ (7,379)
----------- ----------- ----------- -----------
Per share information:
Basic (loss) earnings
per common share:
Net (loss) earnings $ (0.12) $ 0.01 $ (0.05) $ (1.18)
=========== =========== =========== ===========
Diluted (loss)
earnings per common
share:
Net (loss) earnings $ (0.12) $ 0.01 $ (0.05) $ (1.18)
=========== =========== =========== ===========
Weighted average
common shares
outstanding
Basic 6,294,332 6,293,115 6,294,332 6,278,705
=========== =========== =========== ===========
Diluted 6,294,332 6,387,780 6,294,332 6,278,705
=========== =========== =========== ===========
* During the three months ended December 31, 2005, $6,610,500 was
added to Jaco's income tax provision to reduce the carrying value of
the Company's deferred tax asset to zero.
Summary Balance Sheet
As of March 31, 2007 Supplemental Financial
(unaudited) Statistics
Per Share Price
Accounts Receivable (net) $27,925,000 (5/9/07) $3.41
Inventories (net) $35,128,000 Book Value Per Share $5.54
Tangible Book Value
Per Share $1.50
Revolving Credit Facility $34,871,000
Accounts Payable and
Accrued Expenses $25,321,000
Shareholders' Equity $34,861,000
"Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995:
This press release provides historical information and includes
forward-looking statements. Although we believe that the expectations
in such forward-looking statements are reasonable, we can give no
assurance that such expectations will prove to have been correct. The
forward-looking statements are based upon a number of assumptions and
estimates that, while considered reasonable by our management, are
inherently subject to significant business, economic and competitive
risks, uncertainties and contingencies which are beyond our control,
and upon assumptions with respect to future business decisions which
are subject to change. Accordingly, the forward-looking statements are
only an estimate, and actual results will vary from the
forward-looking statements, and these variations may be material.
Consequently, the inclusion of the forward-looking statements should
not be regarded as a representation by us of results that actually
will be achieved. Forward-looking statements are necessarily
speculative in nature, and it is usually the case that one or more of
the assumptions in the forward-looking statements do not materialize.
Investors are cautioned not to place undue reliance on the
forward-looking statements. We caution that, among others, the factors
below, which are discussed in our Annual Report on Form 10-K for the
fiscal year ended June 30, 2006, as amended, and in our other filings
with the Securities and Exchange Commission, could cause our results
to differ materially from those stated in the forward-looking
statements. These factors include (i) the highly cyclical nature of
our industry and the adverse impact of downturns in our industry; (ii)
our dependence on a limited number of suppliers for the products we
distribute and most of our distribution agreements are cancelable upon
short notice; (iii) the market for our products is very competitive
and our industry is subject to rapid technological change; (iv) our
dependence on individual purchase orders and absence of long-term
supply agreements exposes us to customer cancellations, reductions or
delays; (v) our substantial leverage and debt service obligations;
(vi) a significant and growing portion of our business is in non-U.S.
locations, particularly Asia, and failure to expand in Asia could
adversely affect our sales while our dependence on foreign
manufacturers exposes us generally to political and economic risks;
(vii) volatility in the pricing of electronic components; (viii)
disruptions in transportation of our products by third party carriers;
(ix) potential warranty and/or product liability risks inherent in the
products we sell; and (x) our dependence on the continued service of
key members of our management and technical personnel.
CONTACT: Jaco Electronics, Inc.
Jeffrey D. Gash, Chief Financial Officer, 631-273-5500
jgash@jacoelect.com
Or
Jaffoni & Collins Incorporated
Joseph N. Jaffoni / Robert L. Rinderman, 212-835-8500
jaco@jcir.com